As chairman and CEO of Greater Media Inc., the parent company of 23 radio stations located in markets around the country, including seven stations in New Jersey, I have a keen interest in keeping free and local radio a viable industry.

Many of you may have read recent press accounts of the performance royalty legislation pending in Congress. Recording companies and artists have long argued that they should receive a share of the revenue that radio broadcasters pay for playing their music. Current law exempts broadcast radio from paying these royalties, in large part because lawmakers realize the enormous promotional benefit that artists and labels receive from free radio airplay.

My colleagues gathered at the National Association of Broadcasters (NAB) headquarters in Washington, D.C., recently to hear an update on the continuing royalty discussions between radio and recording industry representatives. No vote was taken, and there is no “deal” on the table. But the meeting left me feeling optimistic about possibly removing a significant threat that has been looming over radio for years.

Don’t get me wrong: I am firmly opposed to the idea of taxes, royalties, fees or whatever you want to call new payments that might go to record labels and artists. I don’t want our company to pay any fee for the “privilege” of promoting artists and their music. But when you move beyond the rhetoric and look closely at the proposed terms that are under discussion, including a proposed royalty of up to 1 percent of stations’ net revenue, it seems clear: The conceptual framework provided by NAB’s leadership team is something that the leaders and owners in this great business should seriously consider. And I for one think it would be a huge miscalculation if we do not at least continue a dialogue that might provide the regulatory certainty needed to reopen access to capital and provide long-term opportunities for growth in the radio industry.

In my view, the biggest “get” from any resolution of the performance royalty debate would be the removal of the onerous and unpredictable Copyright Royalty Board decisions that threaten radio’s profitability. Those of us who have to live with these decisions know that the CRB has been downright hostile to the interests of free and local radio. Under the proposed royalty framework, radio would no longer be subjected to the arbitrary rate-setting process of this unelected three-person tribunal. Instead, our rates — on both the streaming side and the terrestrial side — would be permanently set by statute. News/talk and sports stations would be exempt from the 1 percent fee. And under potential terms negotiated by the NAB team, streaming rates would decrease by about 10 percent.

In addition, the NAB framework includes plenty of other potential benefits

for radio. Any agreement would be conditioned on settlement of issues involving the American Federation of Television and Radio Artists (AFTRA) union, which have prevented many stations from streaming commercials, and which have prevented Arbitron, which measures media audiences, from including our streaming audiences in the ratings. Moreover, radio’s reach could be expanded through the incorporation of radio receivers in mobile phones under terms that are being discussed.

The NAB has fought mightily — and successfully — in recent years to prevent the Performance Rights Act from becoming law. It’s only through this position of strength that important concessions have been gained from the recording industry. I think everyone can agree that 1 percent of net revenue — roughly $100 million industry wide — is a lot better than the cost of the currently proposed Performance Rights Act, which analyst Marci Ryvicker estimated could cost the radio business upward of $2 billion annually.

There is no doubt that free, over-the-air radio provides the most valuable promotional exposure of any musical platform in existence. That simple fact cannot go ignored by the recording industry and Congress. But we in the radio industry cannot ignore the potential long-term benefits we can realize under the terms of the royalty proposal being discussed. There may come a day — maybe not this year, and maybe not next year, but in the foreseeable future — when Congress moves forward and legislates a performance tax of 5 percent or more on radio revenues. If that happens, my guess is that the radio broadcasters of tomorrow will judge quite harshly a decision to pass up the opportunity that presents itself today.

Peter Smyth is the chairman and CEO of Greater Media Inc., which also owns a group of weekly newspapers in central New Jersey. He is a member of the board of the National Association of Broadcasters. Radio Ink magazine named him America’s Best Broadcaster in 2005 and Radio Executive of the Year in 2007.